One man show

Concentration risk occurs in marketing too.

Andrew Carrier

Jan 08, 2023

Read on to learn why:

① Brand contagion is rare but real.

② Single points of failure are as big a risk in marketing as operations.

③ A career in the City is not the draw to bright graduates it once was.

④ Middlemen who add little value should be very afraid of blockchain.

⑤ The search engine wars are back on and this time they’ll be fought by AI.

⑥ Meetings aren’t the problem. Badly run meetings are.

⑦ Marketing’s purpose is business growth.

What's new

The FT’s Big Read this weekend is a deep dive on the trouble at Tesla.

Source: The Financial Times, 6 January 2023

In short:

“A Tesla stock price slide that began in the autumn turned into an avalanche; shares are now 73 per cent below their peak of a little more than a year ago. [Owner Elon] Musk himself is $200bn poorer.”
“A resoundingly successful period in which the company’s value peaked at nearly $1.3tn and after-tax profits were projected to hit almost $13bn in 2022 has rapidly given way to a darker economic picture. The main worry of Tesla’s investors has swung from how the company can produce enough cars to meet demand, to where it will find enough customers to justify its sharply rising production.”
“With Tesla ramping up production quickly at giant new plants in Texas and Germany, it now has the added problem of finding many more customers, says Philippe Houchois, a global automotive analyst at Jefferies in London. That has left it facing a “perfect storm”, he adds, with supply increasing, demand slipping and competition intensifying, all on the brink of what could be a severe downturn for the global auto industry.”

Why it matters

To the envy of CEOs everywhere, Elon Musk famously doesn’t spend a dime on advertising at Tesla. Indeed, he doesn’t have communications, PR or marketing teams. And while great customer experience, word-of-mouth, and company purpose certainly help compensate for their absence, there’s no doubt that Musk himself - and particularly his ongoing Twitter presence - fills the void. He is Tesla’s one man marketing team. That’s wonderful. Until it’s not.

① Back in November 2021, we talked about Jamie Dimon and how a forthright CEO is marketing’s greatest asset, and most dangerous threat. Musk takes that concept to a whole new level. The trouble at Tesla matters because it’s a rare example of brand contagion, of poor management at one company having a negative impact on a completely different one, because they share a CEO.

The FT story includes an anecdote about Paul English, a Boston-based tech entrepreneur and long-time Tesla customer:

After witnessing the Tesla’s chief executive’s behaviour since his acquisition of Twitter late last year — including Musk’s brutal treatment of staff as he set about cutting about half the social media company’s workforce — English says he is not certain he will buy another Tesla. Musk “made a massive misjudgment”, he says. “Teslas were largely bought by people who like change and new things. That’s typically people who are educated, and people who are liberal. Guess what educated, liberal people don’t like? Bullies.”

You might think that English is a one-off but the FT reports that, “a survey by Morning Consult found that between October and November, the share of US adults with a favourable view of Tesla fell by six percentage points. Among Democrats, who are likelier to be EV customers, it fell by 20 points.” Indeed, as The Economist adds, “the natural Tesla-owners among the wealthy progressive set are less prepared to overlook Mr Musk’s libertarian antics at Twitter, which he bought in October and has mismanaged with gusto—especially now that they have plenty of conscience-salving ev alternatives to choose from.”

② While it’s possible to entrust your brand’s reputation to one ‘larger than life’ CEO, it’s certainly not sensible. Apart from anything else, you create huge concentration risk since they represent a single point of marketing failure.

What to do about it

Take action

Don't be Elon.
Invest in experienced marketing and communications people - particularly during a downturn.
Accept that you’ll never know which half of it is working and which half is wasted.

Get help

Visit InMarketing, my resource library for leaders in finance or technology who want to innovate, interact and influence.
Join the InMarketing community, either on Twitter or on Substack (you’ll need to download the Substack app and head to the chat tab). Either way, you can ask questions of me and fellow senior marketing practitioners.

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If you found this useful or know someone who would, please share it. It would really help me to grow the community of regular IMTW readers.

Top stories

The other articles that are worthy of your time.

FINANCE

Santander says graduates no longer need a 2:1 or higher to work at the bank

③ A career in the City is not the draw to bright graduates it once was.

“Recent graduates will no longer need an upper second or first-class degree from their university to apply for Santander’s post-university training scheme, opening the programme up to 64,000 more candidates each year.”
“The Spanish bank’s decision echoes similar moves by other City firms. Last August, accountancy giant PwC said it was removing the requirement for an upper second or higher from its graduate jobs, allowing the business to ‘assess (the) potential” of candidates rather than simply judging them on academic performance’. Asset manager Schroders also removed the requirement for a 2:1 degree last autumn.”
“Around 16 per cent of students who leave university come out with a 2:2 degree or a third.”

TECHNOLOGY

How tokenisation is changing the world of finance

④ Middlemen who add little value should be should be very afraid of blockchain.

“Tokenisation is proving to be one of blockchain technology’s most promising use cases thus far. It allows real-world assets to be represented in digital form as ‘tokens’. These tokens can then be traded effortlessly, with all activity being recorded on a blockchain.”
“As Vinoy Kumar, former Global Head of Digital Assets at Standard Chartered, puts it, ‘This is the first time we’re seeing in technology that money and value can travel together.’ Up till now, you could buy a product or service online, but you’d have to transfer money via a bank or a digital wallet. With tokenisation — of both currency and assets — all of it happens together. Web3 facilitates the transfer of both money and information.”
“By doing so, it allows for the removal of intermediaries. In traditional finance, brokers are needed for a variety of services, including stock exchange trading and loan financing. In contrast, Web3 allows these services to be decentralised, wherein brokers can be replaced by smart contracts.”

MEDIA & MARKETING

Microsoft to challenge Google by integrating ChatGPT with Bing search

⑤ The search engine wars are back on and this time they’ll be fought with AI.

“Microsoft is reportedly planning to launch a version of Bing that uses ChatGPT to answer search queries. Microsoft hopes to launch the new feature before the end of March in a bid to make Bing more competitive with Google.”
“By using the technology behind ChatGPT — which is built by AI company OpenAI — Bing could provide more humanlike answers to questions instead of just links to information. Both Google and Bing already surface relevant information from links at the top of many search queries, but Google’s knowledge panels are particularly widespread when it comes to searching for information about people, places, organizations, and things.”
“Microsoft’s use of ChatGPT-like functionality could help Bing rival Google’s Knowledge Graph, a knowledge base that Google uses to serve up instant answers that are regularly updated from crawling the web and user feedback. If Microsoft is ambitious, though, it could even go much further, offering many new types of AI-based functionality.”

WILDCARD

The great meeting bloat deserves this Shopify purge

⑥ Meetings aren’t the problem. Badly run meetings are.

Source: The Financial Times, 5 January 2023

“One announcement this week by Shopify, the Canadian ecommerce platform, seemed to stir an enthusiastic response: namely, a meeting purge.”
“Meeting culls are also popular. No one leaves school hoping to make a career staggering from the 10am gathering to the 11am gathering, after all. But for many white-collar workers, too many days are lost to such pointless events, veering off agenda (if there even is one) with the result that they spend nights or weekends catching up with their actual work.”
“Others voiced concerns about the effects of too much meeting ruthlessness, such as the loss of sociability and exposure to new ideas. One worried that it cut down the opportunities for younger workers to learn from their older peers, or indeed give fresh perspectives.”

Off cuts

The stories that almost made this week’s newsletter.

The last word

⑦ Michael Brenner on why inquiries are not marketing leads:

Michael Brenner. Source: LinkedIn, 6 January 2023

“Marketing should be accountable for driving quantifiable business value. Marketing needs to partner closely with sales.”

Don’t settle for marketing.

Strive for InMarketing: innovate, interact, influence.

Wishing you a productive week,

P.S. Looking for something new to watch tonight? Netflix released its Bernie Madoff documentary this week and it’s riveting. Like me, you might think you know the story but there’s so much more to it than I realised, not least the fact that Madoff was a fraud from the very beginning yet red flags were ignored for decades - because of the industry’s collective greed, fear of missing out, lack of proper due diligence or product expertise and a herd mentality. As journalist Andrew Ross Sorkin says in the opening minutes, “the whole ecosystem completely and utterly failed.”